Up in ARMs

In the past year, adjustable-rate mortgages have become the most popular
way for Americans to buy homes. Though they represented only 13% of the
$516 billion in total mortgages outstanding at the end of last year,
ARMS now make up more than 60% of new home mortgages. Their attraction
for home buyers is that they offer initial rates at about 2% lower than
conventional fixed-rate mortgages, currently pushing 15%. But ARMS
also present a gamble that consumers, in their anxiety to make an
affordable deal, do not always appreciate. Reason: ARMS are tied to the
general interest-rate...